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UPDATE 1-Germany to cut solar subsidies by up to 15 pct
February 24, 2011 / 8:44 PM / 7 years ago

UPDATE 1-Germany to cut solar subsidies by up to 15 pct

* Subsidies to drop starting from July

* Parliament vote deals blow to world’s top solar cell mkt

(Adds detail, background, paragraphs 3-12)

By Markus Wacket

BERLIN, Feb 24 (Reuters) - German lawmakers passed on Thursday a law cutting solar power subsidies by up to 15 percent from this summer, six months earlier than originally planned, dealing a blow to the world’s biggest photovoltaic market.

The lower parliamentary house voted to introduce the cuts for roof installations from July and for ground-based cell assemblies from September.

The vote, which went as expected, ratified a compromise deal agreed at the start of this month by the German cabinet that brought to an end a dispute between the economy and environment ministries.

The economy ministry had wanted cuts of up to 25 percent to slow booming growth in the sector in Germany.

Environment Minister Norbert Roettgen announced plans last month to bring forward the start of the subsidy cuts by six months to July 1.

Germany is the world’s biggest photovoltaic energy market and has helped drive down prices for photovoltaic systems, which turn sunlight into electricity.

The share prices of solar companies such as Solarworld SWVG.DE, Q-Cells QCEG.DE and SMA Solar (S92G.DE) have been at the mercy of German government decisions.

The industry boomed after the Renewable Energy Act (EEG) in 2000, which guarantees investors above-market fees for solar power for 20 years from the point of installation.

Germany added 7 gigawatts (GW) of capacity in a record-breaking year in 2010 to bring the total to nearly 17 GW, equal to 17 large power plants.

A government advisory panel presented a report in January saying the photovoltaic sector in Germany was growing too fast, but the German solar power association (BSW) lobby group said a cap would devastate the sector and endanger 130,000 jobs.

In 2010 German incentives for renewables -- about half of which was for solar power -- totalled about 13 billion euros ($17.9 billion).

The solar cuts bill does not require approval from Germany’s upper house of parliament to become law.

Reporting by Markus Wacket, writing by John Stonestreet; Editing by David Gregorio

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